German vehicle parts supplier STS Group (Hallbergmoos; www.sts.group) said it has completed the announced sale of its acoustics segment (see Plasteurope.com of 27.08.2020) to Adler Pelzer (Villastellone / Italy; www.adlergroup.it). The deal, which took effect on 1 November 2020, includes three plants in Italy (Santhia, Desia, Pignataro) and one each in Poland and Brazil. With the sale, STS is concentrating its European business on plastics, the other major segment. This includes injection moulding activities for passenger cars and commercial vehicles, which will be promoted along with the much smaller materials division and the announced expansion into North America.

Third-quarter results that include the acoustics operations showed STS sales at EUR 82.5m, which matched the number for the same period last year. In the first nine months of 2020, however, revenues declined almost 21%, with decreases spread across virtually all business segments. The exception was China, where sales more than doubled in the third quarter and increased 80% in the course of the current year. Those operations thus almost completely offset all other revenue declines in the third quarter.

There was less reason to cheer on the profit side. Third-quarter EBITDA moved just below zero from EUR 3.1m in the same period last year, and for January-September fell to EUR -4.1m versus EUR 13.2m in 2019. However, this figure includes one-off expenses of EUR 6.0m for the sale of the acoustics unit. A further EUR 1.5m went for job cuts at the Hallbergmoos headquarters announced at the end of the first half. Some former HQ functions were reallocated to the divisions or outsourced; only five of the 40 jobs at Hallbergmoos remain. Without the special effects, EBITDA would have remained just within positive territory.

As a result and in part due to increased depreciation, the net loss for the first three quarters has risen dramatically to EUR -35.3m versus EUR -4.9m in the year-earlier period. Debt increased by nearly EUR 10m to almost EUR 49m.

The bottom line is that there is plenty of work to do for CEO Mathieu Purrey. If another lockdown like the first one in the spring can be avoided, he said he expects a further recovery for the figures in the remaining quarter. Nevertheless, a significant decline in both sales and earnings is expected for the year.